Appeals Court Punts on Obamacare

by Jonathan Ingram Do you think Obamacare should be repealed?  If you do, you’re not alone. Public opposition to Obamacare remains as high as ever. According to the most recent survey by Rasmussen Reports, 57 percent of likely voters favor repealing the law.  What’s more, 54 percent believe repeal is likely, which is the highest level of...

by Jonathan Ingram

Do you think Obamacare should be repealed?  If you do, you’re not alone. Public opposition to Obamacare remains as high as ever. According to the most recent survey by Rasmussen Reports, 57 percent of likely voters favor repealing the law.  What’s more, 54 percent believe repeal is likely, which is the highest level of confidence since Obamacare was enacted.  It seems, then, that most Americans have rejected President Obama’s one-size-fits-all “solution” that does more harm than good.

But Obamacare isn’t harmful to society only because it’s founded upon bad public policy; it’s also founded on unconstitutional restraints on our liberty.  The individual mandate, which requires all Americans to purchase health insurance or pay a penalty to the IRS, is an affront to both individual liberty and the entire federalist system.  If the federal government can mandate that you purchase health insurance, what stops it from mandating that you purchase treasury bonds, electric cars, or anything else? The good news is that this affront has been challenged in federal court and is headed to the Supreme Court.

Unfortunately, not all challenges have met with success.  While the Eleventh Circuit Court of Appeals recently ruled the individual mandate unconstitutional, the Fourth Circuit Court of Appeals dismissed a similar challenge on procedural grounds yesterday.

The three-judge panel consisted of judges appointed by Democrats: one appointed by President Clinton and two appointed by President Obama himself.  The panel held that because Obamacare’s individual mandate applied to individuals, not states, the mandate itself could not cause an injury to the states.  Virginia had argued that the mandate intruded upon its sovereignty, but the panel held that this argument was merely a “smokescreen for Virginia’s attempted vindication of its citizens’ interests.”

The panel’s opinion, however, misses the point: although the individual mandate tramples individual liberty, it also tramples the federalist system.  The fact that it does both shouldn’t be surprising: as the Supreme Court noted earlier this year, the purpose of our federalist system is to protect individual liberty.

The Constitution recognizes that the federal government is one of limited powers.  As the Tenth Amendment succinctly puts it: powers not delegated are reserved to the states or to the people.  Because the federal government has no authority under the Constitution to enact the individual mandate, it necessarily intrudes upon the rights reserved to the states and the people.

These powers include the power to articulate and defend individual rights in spheres outside the scope of federal power.  This is exactly what Virginia did.  Where federal laws and state laws are in conflict, especially when the laws concern subject matters that are traditionally outside the scope of federal regulation, this conflict will generally be enough to meet technical standing requirements.

The fact that the Fourth Circuit refused to adequately address this argument illustrates its deepest flaw.  The panel instead focused on why Virginia enacted the statute, despite the fact that the outcome of standing generally doesn’t depend on it.  Indeed, states have been challenging federal laws in this way for nearly two hundreds years.

But the Virginia case wasn’t the only strange decision the panel released yesterday.  It also dismissedanother challenge to Obamacare by finding that the mandate’s penalty was a “tax.”  No other judge to have addressed the issue, even those upholding Obamacare, has held that the penalty was a tax.  Indeed, the federal government itself rejected this doctrine and conceded that the plaintiffs were notbarred from challenging the law.

In the end, these two decisions do little to change the landscape of the many challenges to Obamacare. Two other appeals courts have ruled on the individual mandate’s constitutionality. Because they disagreed, the Supreme Court is virtually certain to review the case(s).

In the meantime, Americans can continue to push for patient-centered healthcare reform options.  A good place to start would be granting tax incentives for individual ownership of insurance policies, promoting interstate competition and risk pools for insurance companies, and eliminating unnecessary coverage mandates.  These reforms put consumers back in the driver’s seat, ensuring that they have greater choices in picking health insurance plans that work best for their families, not plans that work best for bureaucrats.